1099-MISC and Accounting Fees

[Nashville]

Entity Status

If the LLC does not elect to be treated as a Corporation you would need to issue a 1099, correct?

Jesse, you could very well be right as far as I know. But for LLCs, the form of entity should be transparent as far as my clients are concerned.

I don't know whether the state has anything to do with it, but in Tennessee an LLC is taxed as a corporation for corporate tax purposes regardless of how they checked the box.

As a preparer, I should know the entity status of my clients, but I shouldn't be expected to know the status of all his payees.

If my client were audited, and the auditor wanted to know whether we had chased down every 1099-recipient as to entity status, I would simply tell him they are all corporations under state law, hand him the list of payees, and invite him to follow up. If it's too much hassle for us, you know darn well it's going to be too much of a PITA for the auditor.

[BOB W]

If the LLC does not elect to be treated as a Corporation you would need to issue a 1099, correct?

LLC are always a problem for me as I have to dig into what form it has taken. If other than a Corporation, they get a 1099.

[Zee]

Unless the corporation is an attorney or a medical professional.

I agree. Professional fees to an attorney, doctor or other professional are included. Payments to corporations are included only if they are for medical, health care, legal or fishing activities.

[Jesse]

I don't know why an accountant would be exempt from receiving a 1099 unless he is a corporation or LLC.

I prepare 1099s for a number of my customers, and as some of them have paid me more than $600 I issue a 1099 to myself.

If the LLC does not elect to be treated as a Corporation you would need to issue a 1099, correct?

[AuditorTurnedGood]

thanks everyone

Since I'm an S-Corp, looks like I dodge the bullet. For Sole Props though, that seems like a process.

[Nashville]

Answer is Yes

I don't know why an accountant would be exempt from receiving a 1099 unless he is a corporation or LLC.

I prepare 1099s for a number of my customers, and as some of them have paid me more than $600 I issue a 1099 to myself.

[Jiggers]

Not to corporations

Unless the corporation is an attorney or a medical professional.

[thomtax]

I haven't taken the time to check the instructions, but do you have to issue 1099s to corporations or just to non-incorporated businesses and persons?

[AuditorTurnedGood]

If I have a client pay me more than $600 in a year, should the client (assuming it's a business) issue a 1099-MISC to my S-Corp for the fees? If so, does anyone do this? The Instructions for the form say specifically accountant's fees, but I can't imagine anyone actually doing this. Thoughts?